Paragon2Pieces

Tuesday, September 12, 2017

When I left my second big law firm earlier this year, I decided to try law firm life one more time.

I wanted to narrow my practice. Although lots of folks in the middle and smaller markets try, I do not accept the premise that one person can be an expert at emerging company/venture capital, securities and M&A work. It's wishful thinking at best. Of the three subspecialties, I enjoy M&A the most, so M&A it was.

I wanted to work for acquisitive clients. My prior experience includes a trove of sell-side work. This work is enjoyable at the junior level because diligence and disclosure schedules are, by their nature, more challenging on the sell side. Once an associate graduates from diligence and schedules to drafting definitive agreements, I think she needs to accelerate learning by increasing the number of deals that cross her desk over time. I hoped to accomplish this by pivoting into buy-side work, where you're more likely to find clients that do multiple deals per year.

I wanted the support of specialists. It's not enough to say I was looking for an M&A only corporate practice. To do M&A work well, corporate lawyers need the support of quality specialists.

I wanted to join a group led by partners still in the growth phase of their respective careers. My prior experience includes considerable amounts of time spent serving clients for partners who had one foot out the door. While you would think this type of partner could be great to learn from--they have a wealth of experience to share and are more willing to let associates take the reigns--it usually didn't turn out that way.I wanted an associate stack that would lend itself to opportunity. I graduated from law school in the wake of the recession. Before my first day of work as a lawyer, a first-year associate in the group I was about to join visited partners in my group to make the case for rescinding my offer because that associate felt there wasn't enough work in the group to support another associate. (That's just the tip of the iceberg.) By joining a group as the only associate in my class year (or as the only associate in a number of adjacent class years), I hoped to remove the distractions that arise when associates are playing game of thrones.

I wanted a no asshole policy.
If there's anyone reading this post that has made a lateral move (good or bad), what were the attributes on your lateral move wish list?

Saturday, July 15, 2017

When I set my 2017 goals, I was hoping to create a new habit of reading at least one legal blog post or article each morning not related to that day's work. The purpose of this goal was twofold. First, I was hoping to expand my issue spotting capabilities beyond purely corporate topics (always prepping for that eventual in-house gig!). Second, I was hoping to "discover" a corporate-adjacent sub-specialty of interest.

This goal was neglected for the first half of the year due to a job transition, but here's what I've been reading in July. Unexpectedly, my favorite read so far is the law review article highlighted in yellow below.

7/01/2017 - GE Creates "Yelp for Lawyers" to Assess Outside Law Firms. tl:dr: Each of GE's preferred providers have a page within GE Select Connect that features firm information, including feedback received from GE lawyers (sometimes in the form of "a smiley face, a neutral face or a sad face").

7/02/2017 - The Art of Negotiation. tl;dr: Crossing just one of a counter-party's five core concerns results in conflict. The five core concerns are (1) autonomy, (2) appreciation (acknowledgement of actions), (3) affiliation (treating another as a colleague), (4) status (feeling that others respect one's standing), and (5) having roles and activities that are fulfilling)

7/03/2017 - The Inefficient Evolution of Merger Agreements. tl;dr: Analysis of a data set encompassing 12,407 merger agreements over a twenty-year period. Authors used computer textual analysis to identify precedent and map "family trees" of merger agreements, which show how agreements are created and how they change over time. Argues that big law's repeat M&A customers (i.e., private equity firms) should push lawyers to develop standard forms* since lawyers are unlikely to make the change on their own (standardization reduces transaction costs and helps clients, but cuts into the bottom line of firm revenue). No surprises here for those of us that spend our days (and nights) drafting these agreements, but I think this would be a thought provoking read for a non-transactional lawyer stepping into an in-house role where she will engage outside M&A counsel from time to time.

* The ABA's Model Merger Agreement comes to mind, but--interestingly--only one of the 12,407 merger agreements in the data set appear to have been based on the ABA form.

7/04/2017 - Chancery Opinion Reviews Voting Agreements and Director Compensation. tl;dr: Entire fairness standard applies to directors' decision to grant themselves options as a form of compensation. In order to be illegal, a vote-buying agreement must have as its primary purpose either to defraud or in some way to disenfranchise other stockholders. To avoid allegations of unfair process, uninterested directors should approve arrangements/agreements.

7/05/2017 - DLA Piper's Cyber Attack and Why It Matters. tl;dr: Friends at DLA enjoyed an extended July 4th holiday. The most interesting part of the article wasn't about DLA: "[I]n the first quarter of 2017, there was a nearly 10 percent year-over-year jump in the number of new positions related to data security or privacy, posted at the largest 200 U.S. law firms.... [A]mong those 200 firms, there are 440 attorneys that now list data security, privacy or some variant as the sole or main focus of their practice, even though just a few years ago there were so few attorneys concentrated in this area that his firm did not bother to officially track numbers."

7/06/2017 - Data Breach 101, Part I: Data Breach Notification Laws. tl;dr: State laws dictate data breach notification requirements. There is variance in how personal information is defined, the notice period, the required form and contents of the notice, and whether a private right of action is granted to individuals if a company does not comply with the notification law. The residence of the victimized individual determines the notification laws that apply to his/her notice.

7/08/2017 - "Must Know" D&O: Answers to 10 Common Questions about Portfolio Company D&O Insurance. tl;dr: According to this older article (published in 2005), many early stage private companies carry between $1MM to $5MM in limits. For a modest-sized company, $3MM of D&O insurance can cost in the range of $14,000 to $20,000 annually. For private companies, the insured and types of claims covered by D&O insurance are much broader than I previously thought.

7/09/2017 - Independent Sponsors: How to Leverage This Valuable Channel for Transactions. tl;dr: Acquisition fees usually range from 2% - 5% of enterprise value depending on the size of the transaction. Management fees are a fixed dollar amount or a percentage of EBITDA, or a combination of both. "Promote" or "carried interest" is equity ownership, which--in the most simple form--includes return of capital to the capital partner, plus a preferred return (5% - 8%) to the capital partner, plus a 80% cut of remaining proceeds to the capital the independent sponsor (the remaining 20% goes to the independent sponsor).

7/11/2017 - Lies about Startup Legal Fees. Enjoy reading this author because he has the platform and freedom to say what many an EC/VC attorney wishes they could say.

7/12/2017 - How to Avoid Traps in Letters of Intent. I often read brief articles on corporate law subjects that I deal with every day because I want to improve my ability to communicate the nuts and bolts to clients (and the most junior associates) in simple language. It seems to help to have exposure to written articles that model simple language. However, this particular article was not very strong.

7/13/2017 - SEC Confirms Sales of NFL Fan Memberships Fall Outside of Securities Act. tl;dr: No-action letter allows fans of the Rams NFL team to buy and sell memberships in the LA Fan Club without triggering registration requirements under Section 5 of the Securities Act or Section 12(g) of the Exchange Act. Shade: "[t]he incoming no-action request... did not provide an indication of the expected demand for participation in the membership program including whether the underwhelming performance of the Rams over the last decade would be expected to dampen sales of membership interests."

7/14/2017 - Being a Work Martyr Doesn't Help you Advance your Career. tl;dr: A study conducted by Project: Time Off found that employees who forfeit vacation days do not perform as well as those who take advantage of them.* Those who didn't take time off stated that it was because of "guilt, fear and work martyr habits." In 2016, the average surveyed worker used an average of 16.8 days off! The maximum number of days off I've taken in a year since becoming an associate is five (this was to visit my grandmother immediately before her death). I'm certainly not a "work martyr" (defined as "employees who find it difficult or do not take time off because they feel no one else can do their job"). I don't take vacation days out of fear. For example, as a result of taking a week off due to my grandmothers death, I was taken off two deals, which had an impact on my ability to meet billable hours expectation (not to mention that partners gave me grief even though I was still participating in conference calls during my "time off").

* I think there might be a chicken and egg problem here. I think folks are less likely to take vacation if they understand that their performance has been perceived as poor, as opposed to the absence of vacation causing the poor performance.

7/15/2017 - Illinois Becomes the First State to Pass a Geolocation Privacy Protection Bill. tl;dr: The bill would require private entities collecting geolocation data to first obtain the person’s “affirmative express consent” after providing individuals with “clear, prominent, and accurate notice” that: (1) informs the person that his or her geolocation information will be collected, used, or disclosed; (2) informs the person “in writing” of the specific purposes for the collection, use, or disclosure; and (3) provides the person with a hyperlink or other easy access to the geolocation information collected, used or disclosed. Includes a 15 day cure period. Does not include a private right of action.

You can see that many articles related to my corporate/M&A practice still managed to find their way into the mix! This is due to a backlog of bookmarked articles flagged during the workday.

Monday, June 26, 2017

My nephew was born over the weekend. After what has been a tough couple years in our family--a death and a couple bouts with serious illness--it's so nice to have good news to share. I was able to be at the hospital and meet him just about an hour after he was born. Baby and mom are healthy and doing well.

I was billing while we were all waiting in the L&D family lounge--remember, y'all, friends don't let friends become M&A lawyers.